Altera Narrows 1Q12 Guidance - Analyst Blog


Altera Corporation  ( ALTR ) recently narrowed its guidance for the first quarter of 2012. 

The company now expects revenues to decline by 7% - 9% compared to the earlier projection of a decline of 5% - 9%.

Management had earlier projected revenues to decline as a result of the program timing in the military vertical market and continued softness in sales to wireless customers.

The company expects revenues from wireless segment to move lower across multiple geographies due to continued inventory depletion and softening demand in the second half of 2011.

However, as the quarter progressed, Altera experienced a more pronounced and broader than anticipated inventory adjustment related weakness leading to a more significant decline.

Earlier, earnings estimates declined significantly with the release of fourth quarter results after the company provided a weak guidance for the first quarter of 2012. Altera has a large exposure to the telecommunications industry, in particular China. The recent slowdown in China has adversely impacted the company's business with no relief in the forthcoming quarter.

The new guidance implies revenue guidance between $416.5 million and $425.9 million compared to the previous forecast of $416.5 million and $434.9 million.

Nevertheless, Altera continues to expect that revenue in the second quarter of 2012 will be above first quarter levels. The book-to-bill remains above 1.0 for the quarter.

The guidance had a minimal impact on stock price which inched just 0.73% in regular trading and 0.21% in after-market trading to close at $37.50.

Altera is expected to report first quarter results on April 19, 2012. We do not expect a drastic improvement before the second half of 2012. The weak guidance prompted us to downgrade our recommendation to Underperform from Neutral in January.

We continue to maintain an Underperform recommendation on Altera. Currently, we have a Zacks #3 Rank on the stock which translates into a short-term rating of Hold.

ALTERA CORP ( ALTR ): Free Stock Analysis Report
To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ALTR

More from

Related Videos



Most Active by Volume

  • $16.575 ▼ 0.57%
  • $131.02 ▼ 0.58%
  • $34.50 ▲ 1.44%
  • $57.0633 ▲ 1.45%
  • $34.94 ▲ 1.45%
  • $27.39 ▼ 0.87%
  • $47.155 ▼ 0.62%
  • $110.58 ▼ 0.12%
As of 5/29/2015, 01:35 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by